This ASX stock is up +600% this week as it readies to build a data centre for a US customer

Out of the market darkness of late has shone Saturn-like one fairly obscure stock this week – the ASX-listed DXN Ltd (ASX:DXN) – clocking an eye-catching +650% gains over the last week, and climbing a further +27% on Friday.

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The question now becomes: will it fly too close to the sun? DXN’s performance over the coming weeks could be something like a smallcap sentiment gauge when assessing the Australian market’s appetite, broadly, for the data centre thematic.

That’s because DXN makes data centres – a rarity for the Australian market sorely lacking real AI credentials.

DXN Ltd, at this current time, has all the right elements going for it: namely, Australian market punters are desperate for something showing green shoots in what has been a terrible few months overall, and, DXN Ltd operates in the data centre space.

Data centres are of course the reason Australia’s GDP is growing at all at the moment, and they are inseparably tied to the overhead Artificial Intelligence thematic which still remains relatively infantile.

In the background, SpaceX plans to list on the NASDAQ later this month, and with that company’s often overlooked heavy involvement with Anthropic‘s ability to make its seminal Claude product work.

And of course, Anthropic is set to IPO shortly also, with OpenAI widely seen as not far behind in an upcoming triple string of mega AI IPOs over on Wall Street. In short: AI is set to remain a hot topic for the foreseeable future, and that means data centres will too.

And so what, then, of Australian relative junior DXN Ltd?

The company, which develops “modular datacentres”, surged to its newfound highs on June 3 when it announced an A$9M deal with an undisclosed US company developing an AI cloud networking product.

DXN Ltd will “design, engineer, manufacture and commission a complete turnkey AI HPC Modular Data Centre solution, incorporating DXN’s proprietary prefabricated module platform with fully integrated power, direct-to-chip liquid cooling, fire suppression and building management systems,” the company wrote on Wednesday.

The term modular may remind some investors of ‘modular nuclear reactors,’ which are effectively small-scale reactors easier to transport and which can act as proofs of concept. In that light, DXN’s data centre offering runs along a similar thesis.

“DXN’s prefabricated AI HPC Module range which is factory-built in Australia, fully tested prior to shipment, and deployable within approximately 6–8 months from contract signing; is designed precisely for this market,” the company further elaborated on Wednesday.

In short: while it’s got a long way to go, perhaps DXN Ltd could help the Australian share market look a little bit more modern.

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